The Hindu Business Line : Selling pressure at close wipes out opening gains

The markets appear to be on a downward spiral with corporate announcements drying up, low liquidity, FIIs pulling out, rising interest rates and weakening equity markets in emerging economies. Though the markets opened on a strong note on the back of buying support from the broking community and insurance companies, selling pressure in the closing hours wiped of the opening gains. FIIs pulled out a further Rs 365 crore from the secondary markets taking the total outflow since the beginning of June to about Rs 13,000 crore.

The advances-declines ratio, which was lopsided in favour of the losers, reflected the negative sentiment that prevailed. Though most indices on the BSE declined investors could take respite in the fact that total market capitalisation on the BSE increased by about Rs 122 crore.

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Penny stocks, which were hammered in the recent session, took a further pounding. About 37 per cent of stocks listed on the BSE touched new 52-week lows. Penny stocks and small cap stocks occupied a chunk of the pie. Notable ones in the midcap and large cap space included Tata Tea, Moser Baer, TV Today, Maxwell, Sasken, Punjab National Bank and Union Bank.

Sector Watch

The IT sector was among the major losers. Bears appeared to have spread themselves across the IT field with stocks of all hues and colours shedding values. Aztec Software, Spanco Telesystems, Visualsoft, Hinduja TMT, Zensar, Scandent Solutions, MphasiS BFL, and CMC shed more than five per cent. Many frontline stocks such as Financial Technologies, HCL Infosys, i-Flex and TCS also declined sharply. Bears also waded their way into the media space with stocks in the electronic and print industry shedding significant value. Crest Animation, Deccan Chronicle, Mid-Day Multimedia and Navneet Publications were among the major losers.

Capital goods were next in the line of fire. The BSE Capital Goods index lost about two per cent with 21 of the 25 constituents shedding value. Topping the losers list were Alfa Laval, Dredging Corporation, ABB, Greaves Cotton, Kirloskar Brothers and Bharat Earth Movers. Other significant losers included ABG Heavy Industries, FAG Bearing, Timken, Kalpataru Power, Lakshmi Machine Works, MM Forgings and Usha Martin.

Selling pressure also set in on the FMCG space with declines outnumbering the advances significantly. A one per cent gain in ITC helped the BSE FMCG close almost flat at 1593.8 points. Major losers in the tea space were Bombay Burmah Trading Corporation, McLeod Russel, Jayshree Tea, Dhunseri, Assam Company and Dhunseri. The negative sentiment also spread into the coffee space with Tata Coffee and CCL Products also registered declines. Champagne Indage, United Breweries, Godfrey Phillips, GTC Industries, and McDowell shed significant value.

Gainers & Losers

Kochi Refineries, Wockhardt, Indian Overseas Bank, Apollo Tyres, Bharat Forge and Pfizer were the prominent gainers among the constituents of the Junior Nifty. Topping the losers list were TVS Motor, Jaiprakash Associates, Sterlite, LIC Housing Finance, Corporation Bank and Cummins India.